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Exchange Rate Changes in the OECD-Area 1948-71 a Comparative Time Path Approach*

Published online by Cambridge University Press:  17 August 2016

E.S. Madsen  and
E. Paldam
E.S. Madsen
Affiliation:
Aarhus Business School
E. Paldam
Affiliation:
Aarhus University
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Extract

During the period from 1949 to 1974 exchange rates were almost fixed in the OECD area. Since then some major rates have been moving, but even now most rates remain fixed relatively to each other and it is possible that we are returning to more fixed rates. Therefore it is of some relevance to try to summarize the experience of the few exchange rate changes that took place during the fixed rate period. Section II goes through the currency history of 20 main OECD-countries and identifies the 12 devaluations and 3 revaluations which occured in that period.

We have for each of these 15 cases tried to make a comparable story following the time-path of the same 16 main economic indicators - listed in Table 1 - in the last 3 years before the exchange rate change and in the first 3 years after the change. The changes have different sizes (and signs), happened in 9 different countries and are parts of rather different economic policies, but we shall show below that there are, nevertheless, a few main features that appear to generalize.

Type
Research Article
Information
Recherches Économiques de Louvain/ Louvain Economic Review , Volume 49 , Issue 1 , March 1983 , pp. 25 - 45
Copyright
Copyright © Université catholique de Louvain, Institut de recherches économiques et sociales 1983 

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Footnotes

*

The articles has benefitted from many discussions at our two institutes of several previous versions (in Danish, one of which is published in Nationaløkonomisk Tidsskrift 82/1). The article is an offshot of a larger project camparing price-wage formation etc. in 20 OECD-countries, and has received several grants from the Danish Social Science Research Council. We shall have to rely a great deal on our findings in other pans of the project.

References

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